Project preparation and catalytic funding facilities

Preparation funding covers the work that turns an idea into a project a lender can assess:

• Pre-feasibility and feasibility studies.
• Environmental and social impact assessments.
• Legal, tariff and contract structuring, including power purchase agreements.
• Financial modelling and transaction advisory.
• Early development equity that takes the first risk.

The most important distinction is who can apply. Some facilities accept proposals directly from private developers, often through open calls or rolling portals — examples include EU ElectriFI, the AfDB-managed Sustainable Energy Fund for Africa (for eligible projects), EEP Africa and IFC InfraVentures, which co-develops projects as an early equity partner.

Others only work through governments, accredited entities or partner banks. The Green Climate Fund's preparation facility, the Climate Investment Funds and many multilateral trust funds fall into this group. For these, the route in is the national focal point, an accredited entity or the development bank leading the programme — not a direct application.

Expect to bring something to the table: land rights or a site agreement, early government support, a credible sponsor team and a share of the cost. Grants rarely fund 100% of preparation. Many facilities also want to see how the prepared project will reach financial close, so name the likely lenders early.

International developers, engineering and advisory firms can access several preparation sources, sometimes with a home-country link. The US Trade and Development Agency funds feasibility studies and technical assistance that involve US firms; several European development finance institutions and export credit agencies support their own countries' companies in early development abroad.

Partnering with a local sponsor usually strengthens an application, and some facilities require it. Use the database to find facilities whose geography, sector and stage match the project, and check whether each one requires a local partner.

Screening teams see the same problems again and again:

• Asking a preparation facility for construction money, or vice versa.
• No clear path to revenue or to a paying buyer.
• Weak sponsor track record without a stronger partner.
• Project outside the facility's geography, sector or ticket size.
• No evidence of government or regulatory support where it is needed.